As per news reports,large players such as Motilal Oswal and Nisus Finance are in a race to invest in such properties spread over 100,000-200,000 square feet.Leading property consultancy Knight Frank pegs the redevelopment pipeline of Mumbai’s old residential buildings at INR 1500 billion.With the commercial space having about 10 percent share in the mixed-use projects, industry puts the redevelopment opportunity of commercial space at INR 150 billion.   

 As per the prevailing trend, these properties located in mid-income housing projects are built for sell unlike the typical “build-to-lease” properties in office hubs.For investors, realisation from such properties is higher. There is an expected  30% internal rate of return (IRR) for mixed-use projects compared with a 23-24% IRR for residential properties.

Motilal Oswal Alternates, according to its Managing Director & Co-Head of Real Estate, Saurabh Rathi, is looking to invest in redeveloped properties and are conducting due diligence for a project on Western Expressway in Mumbai, besides evaluating a fund to invest in redeveloped properties, strata sold properties (smaller office or mall properties that are sold to different owners and investors), open plots and other commercial properties. Another fund manager, Nisus Finance is also exploring such deals as there is a huge shortage of office properties in Mumbai and rents have gone through the roof. 

The major plus point of these commercial properties for investment purposes is that they occupy four or five floors of a building and get part occupation certificate which can be handed over to owners while the construction continues.